South Africans smoked 37 billion cigarettes in 2023, but only 13 billion was taxed

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Illicit tobacco products now account for 60%-70% of cigarette sales and causes tremendous damage to the fiscus, according to Sars.

South Africans smoked 37 billion cigarettes last year, but Sars only collected tax on 13 billion of these as the illicit market takes over the industry.

“SATTA therefore appreciates the spotlight that has been shone in recent days on the devastating impact that these criminal networks are having: not just on the national fiscus, but on those who make a living producing legal products.” Motsumi says SATTA also welcomes the Supreme Court of Appeal’s decision to allow Sars’ evidence of illegal tobacco dealing to be submitted in the criminal trial against Walter and Letisha Cyril, who face 164 counts of tax fraud charges regarding illicit cigarettes.

“Cigarette producers like BATSA has to retrench tobacco factory workers and about 500 jobs are currently at risk in third-party logistics companies that transport their products.” Motsumi says if you drill deeper into the tobacco industry, you will find it is not only cigarette manufacturers that have taken a massive knock. The farmers who grow tobacco and the companies that process it also suffered. “The entire value chain has been hammered.”

“Across the value chain, the ones who suffer are farmworkers, growers, processors and factory workers. Hundreds of them.

 

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